Unilever is a consumer goods company. This organisation is a Dutch British transnational company. This organisation was founded in the Netherlands. This company is listed on the Fortune 500 list. Its headquarters are present in London and Rotterdam. This organisation is serving in most of the countries. In this assessment, there is an analysis of the external and market environment that affects the business of Unilever. The key resources that play an important part in the growth and development of Unilever are discussed critically in this assessment. The report comprises of the organisational structure of Unilever. It is very necessary to understand the organisational structure of an organisation to enhance the value of the particular organisation. There are various threats that are alarming to make fruitful Strategies for Unilever is investigated in this report. The key challenges with their strategic solutions are making this report useful for the organisation.
There are different external and market environment that affectsUnilever. This can be understood with the help of the following factors:-
The ease of doing business provided by developed countries leads to easy doing of business by this organisation. This is helpful for Unilever to develop the product in these countries and sell easily. Many of the countries are having political instability. This results in changing of the guidelines for the business leads to Slow Down of the business in such countries. The example of Pakistan can be taken into consideration. This organisation has to face many challenges regarding the launching of a new product in Pakistan due to political instability (Devine & Williams, 2016). This organisation works as a non-domestic organisation in all the countries except the United Kingdom and the Netherlands. This company in many countries is not getting optimum resources to produce a product because of political irregularity. This is a hurdle for this company that is due to the political factor that affects the market position of this organisation.
As the company group, the economy of the particular country also grows. The exchange rates and the interest rate is different all over the world. Therefore this organisation has to face different exchange rate that affects the overall price of the product. The price of the product is also subject to availability of the resources to produce it in the particular country. Theeconomic structure in most of the European countries is supporting this organisation to grow. This company is also growing in the United States of America, Canada and Brazil because of good economic policies regarding businesses (Dirisu, et. al., 2013). Economic policy is not favouring in the Middle East for this company results in less growing business in this path. The inflation rate of the country impacts on increasing or decreasing in the price of the product. This leads to a decrease in the consumer base of Unilever because of the high price of the product.
The social acceptability of product of the Unilever is known to all. The product made by this organisation is socially accepted all over the world. Due to the ineffectiveness geographical division of this organisation in some parts of the world results in less consumer base for this organisation. It is the need for this organisation that developed the product according to the acceptability of the local population. The change in the management strategy for adapting the social change is not accepted by many employees of this organisation that affects the growth of this organisation. Most acceptability of the product of the Unilever is among the people of having age 25 to 50. It is the need for this organisation to make the products acceptable among the other is group people also.
Research and Development Department of this organisation is having the capabilities to develop the product in the efficient and effective manner. The development with the latest technology is accomplished by this organisation. This organisation used to implement functioning and processing that can incur less cost and gives the good product. The technology of automation in producing the goods is also accomplished by this organisation. The challenge with some of the manufacturing facilities of this organisation is to train the employees about the new technology. This organisation has to invest a large amount of training the employees for implementation of the new technology in the functioning (Laursen& Andersen, 2016). This cost varies from developed countries to developing countries. The competitive organisations of Unilever also implement the innovative technology. In this condition, such type of organisation works as a barrier for this organisation.
In some of the countries, the laws are not strictly abode. The same story is followed in the Unilever in the particular country. This affects the image of this organisation at the global level. It is the employees that not strictly follow the law that is associated with the companies in that particular Nation. Therefore there is a need to implement such strategies by Human Resource Department so that implementation of laws will be effective in nature. The equality among the employees is followed in Unilever all over the world. This helps in providing equal opportunities to male as well as a female employee of the organisation. The ethnicity of the particular employee is not considered at all at the time of hiring that is a good part of this organisation. In most of the countries, all legal laws and guidelines are followed by this organisation.
The sustainable environment is the necessity of the world. Implementation of techniques in the production that not create the pollution is the ultimate goal of this organisation in respect to sustainability. The climate change all over the world is when an alarming situation that shows increasing impurities in the environment. The manufacturing facilities are becoming energy efficient by this organisation so that sustainability can be acquired by this organisation. This organisation is also focusing to dispose of the chemical effluent in an eco-friendlymanner (Neff, 2013). The techniques that involve less use of water in the production are implemented by this organisation.
The swot analysis should also be accomplished to analyse the strength, weakness, opportunities and threats regarding Unilever:-
Unilever is having the good amount of resources. Innovation is the key that helps this company to utilise its resources in an efficient manner. The use of resources is done by this company so that sustainable growth can be accomplished. Unilever develops the technology that can develop the product so that a competitive advantage can be gained by Unilever. This organisation is having a leading scientist team, suppliers, human resources that are playing important role in the development of this organisation. This organisation is having a world-class research facility present in the United States of America, United Kingdom,Netherlands, India and China.
The new ideas and thinking are welcomed by the leaders and managers of this organisation. Market research is accomplished by this organisation in which the needs and demands of the customer are analysed. This is beneficial for developing the product by the employees of this organisation according to the needs and demands the customer. The launching of a new product into the market is done by analysing the local knowledge (Gelles, 2015). The regulatory framework, preferences of the consumer and competitive that are already present in the market are analysed then the particular product is launched in the new market. A total investment of pound 1billion is invested in research and development of the products.
Talent acquisition and retention of the employees is done by the human resources of this organisation. The performance analysis is also developed by this organisation to promote the employees of this organisation. For this Unilever, heroes program is done by this organisation in which recognition of the work of the employee is accomplished. It also helps in creating the integrity of the organisation. This is resulting in motivating The Other employees to work better with full of commitment for the organisation.
For the sustainable growth of this organisation, the practices of sustainability are used by this organisation. The resources that are provided by the supplier come under the certification and self-verification provision (Ansah & Poku, 2013). The suppliers have to maintain Unilever sustainable agriculture code so that use of resources can be done efficiently without harming the environment. The agricultural suppliers of this organisation use different online tools provided by this organisation so that benefits can be with both that are the supplier and Unilever.
For better financial position, the engagement of shareholder for the particular extensive time period is done. If the proposal that is made by Unilever is not accepted by most of the shareholders of this organisation then the proposal is a withdrawal by Unilever. This helps in value creation for this organisation. This organisation used to focus on the sales growth. This organisation is having a goal for strong cash flow. The operating margins should be sustainable is the key that helps this organisation in savings different type of cost. Products turnover is also focused by this organisation. This organisation is having the variety of product; therefore, products turnover plays an important role in the financial output. This organisation used to implement the acquisitive growth strategy. With the help of this strategy, a well-renowned brand is purchased by this organisation so that good market share can be gained by this organisation even in the new market. This organisation also involved in repayment of the borrowed fund with immediate cash flow (Sim, et. al., 2016). In this way, a different type of resources and competencies are creating a value addition to this organisation that leads to the growth and success of this organisation.
Organisation structure provides a direction with which organisation can work. The adequate support for the product along with development and launching can be ensured with the help of organisational structure. The organisational structure of Unilever is having a corporate team, product division team and geographical division.
The product type division of this organisation is having refreshment products, home care products, food products and a personal care product. The team which is present in this division analyses the consumer needs regarding such type of product. This team is not able to recognise the needs and demands of the product according to the local Trend of the particular geographical area. This is the reason for creating geographical division also. Genericstrategies are designed in product division that leads to development in the product. Sometimes ineffective coordination of this divisionis recorded with the Research and Development Departmentthat results in a delay in the innovation for the products (Shaikh, 2013). This leads to less competitive advantage situation with this organisation.
The corporate executive team is having a chief executive officer of this organisation. The Human Resource Department, Marketing Department, Research and Development Department, the financial department, the distribution department and legal department is included in this division. Theinclusion of different department only in this division makes this division complex. At the same time, it also facilitates the working and functioning of this organisation of. The marketing department of this organisation decided the investment that has to be done for the advertisement. This decision is taken by the chief executive officer, Marketing department and financial department. The effective decision results in enhancement of coordination between these departments. The situation of conflict also arises because of non-agreement between this department and chief executive officer.
Another example of human resources can be taken into consideration. Different department of the organisation used to provide the data of vacancy in the particular department to human resources department. Human Resource Department hires a competent employee for the particular department enhances the coordination between two departments. If the employee that is hired is not meeting the department necessity then there is the situation in which dissatisfaction is created in the particular department regarding the Human Resource Department (Hussein & Shale, 2014). Therefore it can be said that the corporate division is having pros as well as cons.
The geographical division is also present in the structure of this organisation. Geographical division help to analyse the current trends that are present in the particular local market. These Trends are beneficial in accomplishing the innovation in the product according to the geographical acceptability. There used to be the situation in which minimum support is seen from the higher authority regarding regional strategic implementation. The disadvantage is that the company more focuses on the product division as compared to the geographical division. This geographical division works as a semi-autonomous capable department that is helpful in developing the product according to local needs. This autonomy is like strength for geographical division (Harrabin, 2015).
The innovation in this organisation is due to the research and development department of Unilever. Instead of this packaging is a challenge for this organisation. The products that are manufactured and sold by this organisation involve transportation (Wilshaw, et. al., 2016). Therefore good packaging for the food products and other goods is the challenge. The most innovative technology that is possible for packaging is developed by RND department of this organisation.
The waste management is the challenge with this organisation. The consumer goods involve a large waste product. This organisation needs to focus on the methods by which the treatment of the waste product can be done and they can be used for other different purposes.
For the sustainable environment, this organisation wants to take minimum resources for packaging. Therefore this organisation is focused on creating the carton and secondary packaging items that are having less weight. In this organisation billions of products are packed. Fewer resources requirement for packaging product is the goal that can bring sustainability to the environment as well as for the organisation (Nazarova, 2015).
This organisation is also having a challenge of cost-effective production. The technology that can bring the cost-effective production is being developed by this organisation (Helvoort, et. al., 2014). The Lean manufacturing techniques are implemented by this organisation that results in the minimum use of resource give the maximum product.
The premium product of this organisation are outperforming in the European market is an alarm for Unilever. There is a need to make marketing strategies so that the consumer base of this organisation in the European market can be enhanced. This will also lead in the growth and development of this organisation.
The 2017 annual report of the Unilever states that startup is not having an effect on slowing down the business of Unilever. There is a necessity to make such strategies so that in the future also there will be no effect of the new start-ups on Unilever profit and sales (Jurietti, et. al., 2017).
There is the necessity of development of the marketing team. Marketing that includes integrated promotional mix can be implemented by this organisation. This will lead to the fast promotion of the product in those areas their product of Unilever is less popular.
It is also a challenge for the Unilever to do sustainability marketing. Sustainability marketing is the process to make the customer aware about the product. This can be understood with the help of an example. This organisation has developed comfort a laundry detergent product that helps in requiring less water while washing clothes (Spary, 2015). This takes a lot of time to make aware of the people about the speciality of comfort. Therefore there is a necessity for this organisation to develop the sustainability marketing technique.
Conclusion:
Unilever is working hard for enhancing sustainability. This organisation is improving its technology by implementing the latest technology in manufacturing. This organisation is developing the products that are economically feasible. This is resulting in enhancement of consumer base for this organisation. This organisation is facing large competition in many parts of the world. The key resources that are available to this organisation are playing an important role in the success story of this organisation. The coordination enhanced among the employees of the organisation because of the organisational structure of Unilever. Thecomplexity in the organisation sometimes creates confusion among the employees also. This affects the overall working of the organisation. Different type of challenges in respect to technology,sustainability, workforce,employees, sustainable marketing and geographical demands are present with this organisation.
References:
Ansah, M.O. and Poku, K., (2013) The investigation into consumer response to sales promotional activities: The case of Unilever Ghana Limited. International Review of Management and Marketing, 3(4), pp.134-145.
Devine, J. and Williams, P.N. eds., (2016) The Chemistry and Technology of Edible Oils and Fats: Proceedings of a Conference Arranged by Unilever Limited at Research Department, Port Sunlight, March 10-12th 1959. Netherland: Elsevier.
Dirisu, J.I., Iyiola, O. and Ibidunni, O.S., (2013) Product differentiation: A tool of competitive advantage and optimal organizational performance (A study of Unilever Nigeria PLC). European Scientific Journal, ESJ, 9(34).
Gelles, D., (2015) Unilever finds that shrinking its footprint is a giant task. The New York Times, 21.
Harrabin, R., (2015) Unilever boss urges world leaders to reduce carbon output. BBC News, London, UK, 18th May.
Helvoort, T.V., Berkers, E. and Davids, M., (2014) Spreading knowledge from Unilever R&D Vlaardingen.Half a century of Unilever’s Becel .internal report (Eindhoven, Foundation for History of Technology).
Hussein, I.M., R & Shale, IN (2014) Effects of Sustainable Procurement Practices on Organizational Performance in Manufacturing Sector in Kenya: A Case of Unilever Kenya Limited. European Journal of Business Management, 1(11), pp.417-438.
Jurietti, E., Mandelli, A. and Fuduri?, M., (2017) How do virtual corporate social responsibility dialogues generate value? A case study of The Unilever Sustainable Living Lab. Corporate Social Responsibility and Environmental Management, 24(5), pp.357-367.
Kaur, M., (2013) Rural marketing: A case study on Hindustan Unilever Limited. International Journal of Applied Research and Studies, 2(6), pp.1-14.
Laursen, L.N. and Andersen, P.H., (2016) Supplier involvement in NPD: A quasi-experiment at Unilever. Industrial Marketing Management, 58, pp.162-171.
Nazarova, V., (2015) Corporate Diversification Effect on Firm Value (Unilever Group Case Study). Annals of Economics and Finance, 16(1), pp.173-198.
Neff, J., (2013) Dove: The evolution from ‘Evolution’: Eight years later, how Unilever brand scored another viral hit. AdAge.com.
Sandvik, P.T. and Storli, E., (2013) Big business and small states: Unilever and Norway in the interwar years 1. The Economic History Review, 66(1), pp.109-131.
Scott, A., (2013) Unilever is rethinking capitalism: Why doing good is good for business. Canadian Business, 19.
Shaikh, M.J., (2013) IT Revolutionizing the Supply chain Transformation: A Case Study of Unilever Pakistan Ltd. International Journal of Supply Chain Management, 2(1).
Sim, S., King, H. and Price, E., (2016) The role of science in shaping sustainable business: Unilever case study.In Taking Stock of Industrial Ecology, pp. 291-302
Spray, S., (2015) Unilever says’ brands with a purpose’are growing at twice the speed of others in the portfolio. Retrieved July, 13, p.2017.
Wilshaw, R., Chi, D.Q., Fowler, P. and Thuy, P.T., (2016) Labour Rights in Vietnam: Unilever’s progress and systemic challenges.
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